Colorado lawmakers have passed HB 26-1210, a first-in-the-nation proposal that would prohibit businesses from using certain forms of “surveillance data” to set individualized prices or wages. The bill was passed on May 8, 2026 and now awaits action from Governor Jared Polis, who has not yet indicated whether he will sign or veto the legislation. He has 30 days from the date of passage to sign or veto the legislation.  If he signs the bill, it will take effect in August of this year.

Supporters of the bill argue it is necessary to protect consumers from potentially discriminatory pricing practices powered by artificial intelligence and data collection. But for ecommerce businesses, the proposal raises serious concerns about how broadly written restrictions on personalization and algorithmic commerce could unintentionally disrupt everyday online business operations.

What the Bill Would Do

HB 26-1210 would prohibit businesses from using “surveillance data” to determine individualized pricing or wages. The bill defines surveillance data broadly, including information collected through browsing behavior, purchase history, online activity, demographics, location data, and inferred consumer characteristics.

While the legislation is primarily framed around concerns about “surveillance pricing,” critics warn the bill’s expansive language could create uncertainty for businesses using common ecommerce tools and marketing practices.

That matters because personalization is now deeply embedded in online commerce. Many ecommerce brands rely on data-driven systems to power:

• Loyalty rewards and VIP discounts
• Personalized promotions and coupon offers
• Retention marketing campaigns
• Cart abandonment incentives
• Dynamic promotional pricing
• Customer segmentation
• Product recommendations
• Subscription discounts and member pricing

The concern is that the bill may not clearly distinguish between harmful discriminatory conduct and the personalized experiences consumers already expect and often value.

Why Ecommerce Businesses Should Be Concerned

Although the public discussion around surveillance pricing often focuses on large technology companies, smaller ecommerce brands could face some of the greatest compliance challenges.

Many small and medium-sized ecommerce businesses depend on affordable third-party marketing platforms, advertising tools, customer analytics software, and personalization systems to remain competitive. Broad or unclear restrictions on algorithmic commerce could create operational and legal uncertainty across the ecommerce ecosystem.

Questions businesses may face include:

• Could loyalty rewards programs be interpreted as individualized pricing?
• Would personalized discounts become legally risky?
• Could retention marketing campaigns trigger compliance concerns?
• Would ecommerce platforms limit personalization features nationally to avoid regulatory complexity?

If businesses become uncertain about what is permitted, many may reduce or eliminate personalization tools altogether. That could ultimately harm consumers as well by limiting access to targeted savings, customized shopping experiences, and loyalty incentives.

A Growing National Trend

Colorado is not alone. Across the country, lawmakers are increasingly scrutinizing algorithmic systems, digital advertising, AI-driven commerce tools, and personalized pricing practices. Similar proposals and regulatory discussions are emerging in states including Pennsylvania, Massachusetts, California, and New York.

The scrutiny is also expanding beyond the state level. Earlier this year, U.S. House Democrats launched a federal inquiry into retailers’ use of so-called “surveillance pricing,” requesting information from major companies about how consumer data may influence individualized pricing practices. The inquiry signals that concerns around personalization, algorithmic commerce, and data-driven pricing are increasingly becoming part of a broader national policy debate — not just isolated state-level proposals.

EIA has already raised concerns about this trend. Earlier this year, EIA opposed Pennsylvania HB 1942 because of the bill’s potential impact on retention marketing and customer engagement practices commonly used by ecommerce businesses. At the time, EIA warned that overly broad restrictions on “surveillance pricing” could unintentionally disrupt legitimate ecommerce operations while reducing competition and innovation. Colorado’s HB 26-1210 reinforces those concerns.

Even businesses that do not operate directly in Colorado could feel the effects if ecommerce platforms and software providers decide to apply compliance changes nationwide rather than manage different state-by-state systems.

The Ecommerce Innovation Alliance has also formally urged Governor Polis to veto HB 26-1210. In a letter sent to the Governor’s office, EIA President & CEO David Carter warned that the bill’s broad definitions and private right of action could expose ecommerce businesses to abusive litigation while discouraging the personalized offers and loyalty incentives consumers routinely benefit from. The letter argued that the legislation risks targeting lawful ecommerce personalization practices rather than narrowly addressing genuine discriminatory conduct.

Supporters Say Consumer Protections Are Needed

Several consumer advocacy organizations have praised Colorado lawmakers for advancing the legislation. Consumer Reports called on Governor Polis to sign the bill, arguing that surveillance pricing can allow businesses to charge consumers differently based on personal data rather than market conditions. The Electronic Privacy Information Center (EPIC) has similarly supported restrictions on surveillance pricing practices, citing concerns around fairness, privacy, and algorithmic discrimination.

Consumer advocates argue that increased transparency and limits on data-driven pricing are necessary as AI and predictive analytics become more common in digital commerce. Those concerns are part of a broader national conversation around consumer privacy and algorithmic accountability that lawmakers across the political spectrum are increasingly engaging with.

Opponents Warn of Unintended Consequences

At the same time, industry groups and business advocates warn that HB 26-1210 could create unintended consequences due to the bill’s broad definitions and unclear compliance standards.

The Chamber of Progress submitted testimony opposing the legislation, arguing that the proposal could unintentionally restrict beneficial personalization practices that consumers regularly use and appreciate. They have asked Governor Jared Polis to veto the bill. 

Critics also warn the bill could discourage innovation, increase compliance burdens, and disproportionately impact smaller businesses without dedicated legal and compliance teams.

For ecommerce brands, the concern is not simply about pricing. It is about whether lawmakers fully understand how personalization functions across the broader ecommerce ecosystem. 

Modern ecommerce relies heavily on data-driven systems to improve customer experiences, deliver relevant promotions, reduce advertising inefficiencies, and help businesses compete in a crowded marketplace. Poorly tailored regulations risk undermining those benefits without clearly targeting harmful behavior.

What Comes Next

Governor Polis has not yet announced whether he will sign HB 26-1210 into law. Regardless of the outcome, however, the bill signals where ecommerce policy debates are increasingly headed.

State lawmakers are paying closer attention to AI systems, digital advertising, personalization, and algorithmic decision-making. That means ecommerce businesses should expect continued scrutiny of the tools and practices that power modern online retail.

As Colorado’s debate demonstrates, the future of ecommerce personalization may increasingly be shaped at the state level — with national consequences for businesses and consumers alike.

Join the EIA today to help strengthen and shape policies that affect all ecommerce businesses. Together, we can continue to create the future of ecommerce. Subscribe to EIA email updates to stay informed on key developments and their impact on your business. 

Ecommerce Innovation Alliance provides members with analysis of litigation and regulatory developments affecting online commerce and digital marketing. This post is for informational purposes only and does not constitute legal advice.